a. Assume that, in the production of rail services, labor is the only variable i

Question

a. Assume that, in the production of rail services, labor is the only variable input. Graphically depict a labor productivity curve. Identify the point at which diminishing returns to the fixed factor of production occurs?

b. Over time, there will be technological progress. Identify graphically the effect of technological progress on the labor productivity curve. Holding all else constant, suppose the level of fixed capital increases. How will this affect the labor productivity curve? Is capital investment the same as technological progress?

c. Suppose you are analyzing total costs for a railroad between 1950 and 1970 using a translog cost function framework. You collect information on the costs of production, input prices for labor, fuel, materials, capital, and route structure, and operating characteristics (such as average length of haul and average load). How would you account for technological progress in this study. Can you be sure that you're identifying the effect of technological progress? Why or why not?

Explanation / Answer

dentify the point at which diminishing returns to the fixed factor of production occurs?

when you have 0 productions

How will this affect the labor productivity curve? Is capital investment the same as technological progress?

this affect the labor productivity curve like negative, that means relation negative

for the other question

please post it in a new question

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